Updated Saturday, July 26, 2014 as of 11:10 AM ET
Portfolio - Fixed Income
El-Erian Exit Is Pimco Distraction as Gross Seeks to Save Legacy
by: Alexis Leondis
Monday, March 10, 2014
Print
Email
Reprints

(Bloomberg) -- Bill Gross, in an investment outlook in April entitled “Man in the Mirror,” questioned whether he was truly a great investor as he pondered his legacy in a new era of shrinking bond returns.

Almost a year later, his largest fund, the $236 billion Pimco Total Return, is trailing rivals, prompting clients to pull money for 10 straight months. On top of that, the 69-year- old is entangled in an ugly split from his former heir apparent Mohamed El-Erian, with allegations of phone surveillance and public humiliations, that has painted a picture of Gross as an autocratic leader struggling to maintain his composure.

The departure of El-Erian and other top executives in the past year has become a distraction at a critical time for Pacific Investment Management Co., the Newport Beach, California firm he co-founded in 1971 and built into the world’s largest fixed-income manager amid a three-decade rally in bonds. As rising interest rates worldwide have prompted investors to flee bond strategies over the past year, Gross’s ability to improve returns is crucial for Pimco to reverse client redemptions.

“This clearly has the potential for being distracting,” said Michael Rosen, CIO at Angeles Investment Advisors LLC, a Santa Monica, California-based consultant to institutions. “We prefer our portfolio managers to simply manage portfolios and not spend time thinking about what’s being said in the media.”

Get access to this article and thousands more...

All On Wall Street articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Lists
2014 Summer Reading List for Advisors

Current Issue

The June Issue is now online!


TWITTER
FACEBOOK
LINKEDIN

Industry Events

August 10, 2014 |

September 9, 2014 |

September 17, 2014 |

September 20, 2014 |

September 28, 2014 |

Already a subscriber? Log in here